California is on the brink of another massive fight over taxes, and the “mansion tax” levied on Los Angeles’ high-value properties is about to become the unlikely—and controversial—face of a sweeping statewide campaign. In 2022, Los Angeles voters backed Measure ULA, which slapped a hefty new fee on the sale of million-dollar real estate. Since then, the measure has been relentlessly debated. Supporters call it a lifeline that has already raised some $830 million for the city’s unhoused and housing insecure population. But critics have branded it an “economic own-goal” that has drastically choked off apartment construction in a city already suffering from an excruciating housing shortage.
That local debate is now exploding onto the state stage. The Howard Jarvis Taxpayers Association, a powerful low-tax advocacy group, is currently gathering signatures for a proposed constitutional amendment on California’s November 2026 ballot. Their central pitch is simple and highly effective: no more Measure ULAs. The association and its political allies are happy to make the controversial Los Angeles tax the primary symbol of their campaign to cap taxes statewide. The stakes are enormous: if the measure succeeds, municipal governments across the state stand to lose billions of dollars in vital funding.
How the Anti-Tax Measure Aims to Crush Local Revenue
The proposed constitutional amendment takes a direct, two-pronged approach to dismantle local revenue streams:
- Transfer Taxes Capped: The measure would cap rates on the sale of real estate at a little more than one-twentieth of one percent of the property’s value. This is a massive cut; Los Angeles’ highest rate is currently one hundred-times higher.
- Voter Threshold Raised: It also targets local tax measures put on the ballot by citizen-backed campaigns that are earmarked for a particular purpose. The tax-capping proposal would raise the electoral support needed to pass these types of “special” tax measures to two-thirds, up from a simple majority of more than 50%.
Measure ULA happens to be both of these: it is a transfer tax hike that was put on the ballot by voters and passed with 58% of the vote in Los Angeles.
Rob Lapsely, president of the California Business Roundtable, confirmed the strategic timing, saying: “Putting a lid on both citizen-initiated tax measures and high transfer taxes ‘is something that we have always had as a priority,’”. He added, “‘And then suddenly, along came Measure ULA.'”.
The Mansion Tax Debate: Lifeline vs. Economic ‘Own-Goal’
The City of Los Angeles sold Measure ULA to voters as a “mansion tax” because its new, elevated transfer fees apply only to the highest value sales : 4% on properties between $5 million and $10 million and 5.5% for those above that.
The Good: Since going into effect in 2023, the measure has raised some $830 million for critical services, making it the largest single contributor to the city’s overall homelessness spending. The program is now accepting applications for its first major distribution of funds, with plans to push nearly $400 million out the door to ramp up affordable housing development.
The Bad: Critics point out that ULA’s high rates apply not just to mansions, but also to commercial, industrial, and multifamily residential projects, including land sales for new apartment developments. Apartment construction has “slowed to a crawl” across the city, and developers and researchers blame the high transfer taxes for driving new construction down further than in surrounding cities. One report estimated the measure resulted in 1,910 fewer apartments per year, including 168 fewer affordable units. Furthermore, a separate study found that the dramatic slow down in sales offset an estimated 63% of the collected transfer tax revenue.
The Looming Fiscal Disaster for Cities
The Howard Jarvis Taxpayers Association is raising funds and moving forward with its signature gathering effort. This has given local government groups billions of reasons to worry. If the measure becomes law, cities would lose between $2 billion and $3 billion each year, according to an analysis commissioned by the League of California Cities, a lobbying group.
This massive shortfall includes hundreds of millions of dollars in foregone funding for homelessness services and new housing in Los Angeles and Santa Monica. But it would also slash budgets for cities that use transfer taxes simply to top up their general funds. The City of Berkeley, for instance, stands to lose between $33 million and $63 million, which is the equivalent of between 15-30% of the town’s general fund.
This political battle over taxes has been a storied California tradition since voters passed Proposition 13 in 1978, capping property taxes. The latest chapter began in 2017 when the California Supreme Court ruled that citizen-initiated special tax measures only needed a simple majority to pass, an issue that business groups have been clambering to close ever since. Now, with Measure ULA as the perfect target, the fight is on to radically change the state’s tax landscape.